Getting Good Inc., Part II

It was a nice honor to be noted as one of America’s fastest growing companies as an Inc. 500 company two years in a row in 2006 and 2007 (one of them here), but it is an even nicer honor to be noted as one of the Top 20 small/medium sized businesses to work for in America by Winning Workplaces and Inc. Magazine.  In addition to the award, we were featured in this month’s issue of Inc. with a specific article about transparency, and important element of our corporate culture, on p72 and online here.

Why a nicer honor?  Simply put, because we pride ourselves on being a great place to work — and we work hard at it.  My colleague Angela Baldonero, our SVP People, talks about this in more depth here. Congratulations to all of our employees, past and present, for this award, and a special thanks to Angela and the rest of the exec team for being such awesome stewards of our culture!

Across 22 years and two companies now, our system of giving performance feedback has evolved significantly. I thought I’d take a pass at chronicling it here and seeing if I had any learnings from looking at the evolution. Here’s how things evolved over the years:

• Written performance reviews. The first year of Return Path, we had a pretty standard process for reviews. They were more or less “one-way” (meaning managers wrote reviews for their direct reports), and they only happened annually.
• Written 360 reviews. We pretty quickly moved from one-way reviews to 360s. I wrote about this here, but we always felt that being able to give/receive feedback in all directions was critical to getting a full picture of your strengths and weaknesses.
• Live 360 reviews. In addition to the above post/link, I wrote about this a bit further here and here. The short of it is that we evolved written 360s for senior leaders into facilitated live conversations among all the reviewers in order to resolve conflicting feedback and prioritize action items.
• Live 360 reviews with the subject in the room. I wrote about this here…the addition of the subject of the review into an observer/clarifying role present for the facilitated live conversation.
• Peer feedback. At some point, we started doing team-based reviews on a regular cadence (usually quarterly) where everyone on a team reviews everyone on a team round-robin style in a live meeting.

The evolution follows an interesting pattern of increasing utility combined with increasing transparency. The more data that is available to more people, the more actionable the feedback has gotten.

The pluses of this model are clear. A steady diet of feedback is much better than getting something once a year. Having the opportunity to prioritize and clarify conflicts in feedback is key. Hearing it firsthand is better than having it filtered.

The biggest minuses of this model are less clear. One could be that in round robin feedback, unless you spend several hours at it, it’s possible that some detail and nuance get lost in the name of prioritization. Another could be that so much transparency means that important feedback is hidden because the people giving the feedback are nervous to give it. One thing to note as a mitigating factor on this last point is that the feedback we’re talking about coming in a peer feedback session is all what I’d call “in bounds” feedback. When there is very serious feedback (e.g., performance or behavioral issues that could lead to a PIP or termination), it doesn’t always surface in peer feedback sessions – it takes a direct back channel line to the person’s manager or to HR.

The main conclusion I draw from studying this evolution is that feedback processes by design vary with culture. The more our culture at Return Path got deeper and deeper into transparency and into training people on giving/receiving feedback and training on the Difficult Conversations and Action/Design methodologies, the more we were able to make it safe to give tough feedback directly to someone’s face, even in a group setting. That does not mean that all companies could handle that kind of radical transparency, especially without a journey that includes increasing the level of transparency of feedback one step at a time. At Bolster, where the culture is rooted in transparency from the get go, we have been able to start the feedback journey at the Peer Feedback level, although now that I lay it out, I’m worried we may not be doing enough to make sure that the peer feedback format is meaningful enough especially around depth of feedback!

People First

I do not think it’s telling that my fourth post in this series of posts on Return Path’s core values (kickoff post, tag cloud) is something called People First.  Ok, it probably should have been the first post in the series.  To be fair, it is the first value on our list, but for whatever reason, the value about Ownership was top of mind when I decided to create this series.

Anyway, at Return Path,

We believe that people come first

And we aren’t shy about saying it publicly, either.  This came up in a lengthy interview I did with Inc. Magazine last year when we were profiled for winning an award as one of the top 20 small- and mid-sized businesses to work for in America.  After re-reading that article, I went back and tried to find the slide from our investor presentations that I referred to.  I have a few versions of this slide from different points in time, including one that’s simpler (it only has employees, clients, and shareholder on it) but here’s a sample of it:

That pretty much says it all.  We believe that if we have the best and most engaged workforce, we will do the best job at solving our clients’ problems, and if we do that well, our shareholders will win, too.

How does this “people first” mentality influence my/our day-to-day activities?  Here are a few examples:

• We treat all employees well, regardless of level or department.  All employees are important to us achieving our mission – otherwise, they wouldn’t be here.  So we don’t do a lot of things that other companies do like send our top performing sales reps on a boondogle together while the engineers and accountants slave away in the office as second-class citizens.  That would be something you might see in a “sales first” or “customer first” culture
• We fiercely defend the human capital of our organization.  There are two examples I can think of around this point.  First, we do not tolerate abusive clients. Fortunately, they are rare, but more than once over the years either I or a member of my senior team has had to get on the phone with a client and reprimand them, or even terminate their contract with us, for treating one of our employees poorly and unprofessionally. And along the same lines, when all economic hell broke loose in the fall of 2008, we immediately told employees that while we’d be in for a rough ride, our three top priorities were to keep everyone’s job, keep everyone’s compensation, and keep everyone’s health benefits. Fortunately, our business withstood the financial challenges and we were able to get through the financial crisis with those three things intact.
• We walk the walk with regard to employee feedback.  Everyone does employee satisfaction surveys, but we are very rigorous about understanding what areas are making people relatively unhappy (for us, even our poor ratings are pretty good, but they’re poor relative to other ratings), and where in the employee population (office, department, level) those issues lie.  We highlight them in an all-hands meeting or communication, we develop specific action plans around them, and we measure those same questions and responses the next time we do a survey to see how we’ve improved
• We invest in our people.  We pay them fairly well, but that’s not what I’m talking about.  We invest in their learning and growth, which is the lifeblood of knowledge workers.  We do an enormous amount of internal training.  We encourage, support, and pay for outside training and education.  We are very generous with the things that allow our employees to be happy and healthy, from food to fitness to insurance to time off to a flexible environment to allowing them to work from another office, or even remotely, if their lives require them to move somewhere else
• I spend as little time as I possibly can managing my shareholders and as much time as I can with employees and prospective employees.  That doesn’t mean I don’t interact with my Board members – I do that quite a bit.  But it does mean that when I do interact with them, it’s more about what they can do for Return Path and less about reporting information to them.  I do send them a lot of information, but the information flow works well for them and simultaneously minimizes my time commitment to the process:  (1) reporting comes in a very consistent format so that investors know WHAT to expect and what they’re looking at, (2) reporting comes out with a consistently long lead time prior to a meeting so investors know WHEN to expect the information, (3) the format of the information is co-developed with investors so they are getting the material they WANT, and (4) we automate as much of the information production as possible and delegate it out across the organization as much as possible so there’s not a heavy burden on any one employee to produce it
• When we do spend time with customers (which is hopefully a lot as well), we try to spread that time out across a broad base of employees, not just salespeople and account managers, so that as many of our employees can develop a deep enough understanding of what our customers’ lives are like and how we impact them

There are plenty of companies out there who have a “shareholder first” or “customer first” philosophy.  I’m not saying those are necessarily wrong – but at least in our industry, I’ll bet companies like that end up with significantly higher recruiting costs (we source almost half our new hires from existing employee referrals), higher employee churn, and therefore lower revenue and profit per employee metrics at a minimum.  Those things must lead to less happy customers, especially in this day and age of transparency.  And all of those things probably degrade shareholder value, at least over the long haul.

Return Path Core Values, Part II

As I said at the beginning of this series, I was excited to share the values that have made us successful with the world and to also articulate more for the company some of the thinking behind the statements.

You can click on the tag for all the posts on the 13 Return Path’s core values, but the full list of the values is below, with links to each individual post, for reference:

1. We believe that people come first
2. We believe in doing the right thing
3. We solve problems together and always present problems with potential solutions or paths to solutions
4. We believe in keeping the commitments we make, and communicate obsessively when we can’t
5. We don’t want you to be embarrassed if you make a mistake; communicate about it and learn from it
6. We believe in being transparent and direct
7. We challenge complacency, mediocrity, and decisions that don’t make sense
8. We believe that results and effort are both critical components of execution
9. We are serious and passionate about our job and positive and light-hearted about our day
10. We are obsessively kind to and respectful of each other
11. We realize that people work to live, not live to work
12. We are all owners in the business and think of our employment at the company as a two-way street
13. We believe inboxes should only contain messages that are relevant, trusted, and safe

As I noted in my initial post, every employee as of August 2008 was involved in the drafting of these statements.  That’s a long post for another time, but it’s an important part of the equation here.  These were not top-down statements written by me or other executives or by our People team.  Some are more aspirational than others, but they are the aspirations of the company, not of management!

A Lighter, Yet Darker, Note

I’ve been meaning to post about this for some time now since my colleague Tami Forman introduced me to this company.  It’s a riot.

You know all those well-intentioned, but slightly cheesy motivational posters you see in places like dentists’ offices?  The kind that talk about “Perseverence” and “Commitment” and “Dare to Dream” and have some beautiful or unique, usually nature-centric image to go with them and their tag line?

For the sarcastic among us, you must visit Despair, Inc.’s web site, in particular any of the “Individual Designs” sections featured on the left side navigation.  The posters are brilliant spoofs on the above, with such gems as “Agony” and “Strife” and “Despair” (whose tag line is “It’s always darkest just before it goes pitch black”).  E.L. Kersten is one funny, albeit strange dude.

Worth a look, and everything is for sale there, too, in case you need to have these posted in a back room somewhere.

Solving Problems Together

Last week, I started a series of new posts about our core values (a new tag in the tag cloud for this series) at Return Path.  Read the first one on Ownership here.

Another one of our core values is around problem solving, and ownership is intrinsically related.  We believe that all employees are responsible for owning solutions, not just surfacing problems.  The second core value I’ll write about in this series is written specifically as:

We solve problems together and always present problems with potential solutions or paths to solutions

In terms of how this value manifests itself in our daily existence, for one thing, I see people working across teams and departments regularly, at their own initiative, to solve problems here.  It happens in a very natural way.  Things don’t have to get escalated up and down management chains.  People at all levels seem to be very focused on solving problems, not just pointing them out, and they have good instincts for where, when, and how they can help on critical (and non-critical) items.

Another example, again relative to other workplaces I’ve either been at or seen, is that people complain a lot less here.  If they see something they don’t like, they do something about it, solve the problem themselves, or escalate quickly and professionally. The amount of finger pointing tends to be very low, and quite frankly, when fingers are pointed, they’re usually pointed inward to ask the question, “what could I have done differently?”

The danger of a highly collaborative culture like ours is teams getting stuck in consensus-seeking.  Beware!  The key is to balance collaboration on high value projects with authoritative leadership & direction.

A steady flow of problems are inherent in any business.  I’m thankful that my colleagues are generally quite strong at solving them!

Return Path Core Values

At Return Path, we have a list of 13 core values that was carefully cultivated and written by a committee of the whole (literally, every employee was involved) about 3 years ago.

I love our values, and I think they serve us incredibly well — both for what they are, and for documenting them and discussing them publicly.  So I’ve decided to publish a blog post about each one (not in order, and not to the exclusion of other blog posts) over the next few months.  I’ll probably do one every other week through the end of the year.  The first one will come in a few minutes.

To whet your appetite, here’s the full list of values:

1. We believe that people come first
2. We believe in doing the right thing
3. We solve problems together and always present problems with potential solutions or paths to solutions
4. We believe in keeping the commitments we make, and communicate obsessively when we can’t
5. We don’t want you to be embarrassed if you make a mistake; communicate about them and learn from them
6. We believe in being transparent and direct
7. We challenge complacency, mediocrity, and decisions that don’t make sense
8. We value execution and results, not effort on its own
9. We are serious and passionate about our job and positive and light-hearted about our day
10. We are obsessively kind to and respectful of each other
11. We realize that people work to live, not live to work
12. We are all owners in the business and think of our employment at the company as a two-way street
13. We believe inboxes should only contain messages that are relevant, trusted, and safe

Do these sound like Motherhood and Apple Pie?  Yes.  Do I worry when I publish them like this that people will remind me that Enron’s number one value was Integrity?  Totally.  But am I proud of my company, and do I feel like we live these every day…and that that’s one of the things that gives us massive competitive advantage in life?  Absolutely!  In truth, some of these are more aspirational than others, but they’re written as strong action verbs, not with “we will try to” mushiness.

I will start a tag for my tag cloud today called Return Path core values.  There won’t be much in it today, but there will be soon!

The Gift of Feedback, Part III

I’ve written about our 360 Review process at Return Path a few times in the past:

• overall process
• process for my review in particular
• update on a process change and unintended consequences of that process change)
• learnings from this year’s process about my staff

And the last two times around, I’ve also posted the output of my own review publicly here in the form of my development plan:

• Here in 2008
• Here in 2009

So here we are again.  I have my new development plan all spruced up and ready to go.  Many thanks to my team and Board for this valuable input, and to Angela Baldonero (my fantastic SVP People and in-house coach), and Marc Maltz of Triad Consulting for helping me interpret the data and draft this plan.  Here at a high level is what I’m going to be working on for the next 1-2 years:

• Institutionalize impatience and lessen the dependency dynamic on me.  What does this mean?  Basically it means that I want to make others in the organization and on my team in particular as impatient as I am for progress, success, reinvention, streamlining and overcoming/minimizing operational realities.  I’ll talk more about something I’ve taken to calling “productive disruption” in a future blog post
• Focus on making every staff interaction at all levels a coaching session.  Despite some efforts over the years, I still feel like I talk too much when I interact with people in the organization on a 1:1 or small group basis.  I should be asking many more questions and teaching people to fish, not fishing for them
• Continue to foster deep and sustained engagement at all levels.  We’ve done a lot of this, really well, over the years.  But at nearly 250 people now and growing rapidly, it’s getting harder and harder.  I want to focus some real time and energy in the months to come on making sure we keep this critical element of our culture vibrant at our new size and stage
• I have some other more tactical goals as well like improving at public speaking and getting more involved with leadership recruiting and management training, but the above items are more or less the nub of it

One thing I know I’ll have to do with some of these items and some of the tactical ones in particular is engage in some form of deliberate practice, as defined by Geoffrey Colvin in his book Talent is Overrated (blog post on the book here).  That will be interesting to figure out.

But that’s the story.  Everyone at Return Path and on my Board – please help me meet these important goals for my development over the next couple of years!

Symbolism in Action

A couple months ago, I wrote about how the idiots who run the Big 3 US automakers in Detroit don’t have a clue about symbolism — the art or the science of it.  Yesterday, I wrote about how I think the non-headcount cuts to G&A that we’re making at Return Path during these challenging economic times will be positive for the company in the long run.  The two topics are closely related.

Obama announces on Day 1 that White House staffers who make more than $100k won’t be getting a pay raise this year.  Presumably all of those people just started their jobs on January 20 and wouldn’t be eligible for a raise until 2010.  Return Path cuts pilates classes in its Colorado office — an expense that must cost around $3,000/year.  Practically speaking, it won’t make a difference to our budget one way or another.  Microsoft lays off 1,400 people — a real number, certainly for those families — but that’s the equivalent of Return Path laying off 2 people. 

Sometimes the symbolic is just that.  It is something designed to send a signal to others, and not much more.  You could argue that all three examples above mean nothing in reality, so they were just symbolic.  A waste of time.

You can also make the argument that sometimes, when done right, symbolism turns into action as it motivates or serves as a catalyst for other changes.  Obama’s cuts may be fictitious, but they set the tone for broader action across a 2mm person bureaucracy.  Pilates in the office?  Feels too excessive these days, even for a company obsessed with its employees and their well being, in an era where we’re cutting back other things that are more serious.  Microsoft has gobs of cash and doesn’t need to worry about its future, but it wants to tell the other 99% of its employee population that it’s time to buckle down and fly straight.  And they will.

Anyone who thinks the synbolic doesn’t influence the practical should think again.  Or just talk to Caroline Kennedy about the impact of her admission that she hadn’t voted in years on her political ambitions.

Closer to the Front Lines, II

Last year, I wrote about our sabbatical policy and how I had spent six weeks filling in for George when he was out.  I just finished up filling in for Jack (our COO/CFO) while he was out on his.  Although for a variety of reasons I wasn’t as deeply engaged with Jack’s team as I was last year with George’s, I did find some great benefits to working more directly with them.

In addition to the ones I wrote about last year, another discovery, or rather, reminder, that I got this time around was that the bigger the company gets and the more specialized skill sets become, there are an increasing number of jobs that I couldn’t step in and do in a pinch.  I used to feel this way about all non-technical jobs in the early years of the company, but not so much any more. 

Anyway, it’s always a busy time doing two jobs, and probably both jobs suffer a bit in the short term.  But it’s a great experience overall for me as a leader.  Anita’s sabbatical will also hit in 2010 — is everyone ready for me to run sales for half a quarter?

How to Get Laid Off – an Employee’s Perspective

One of my colleagues at Return Path  saw my post about How to Quit Your Job about 5 years ago and was inspired to share this story with me.  Don’t read anything into this post, team!  There is no other meaning behind my posting it at this time, or any time, other than thinking it’s a very good way of approaching a very difficult situation, especially coming from an employee.

In 2009 I was working at a software security start up in the Silicon Valley.  Times were exceedingly tough, there were several rounds of layoffs that year, and in May I was finally on the list. I was informed on a Tuesday that my last day was that Friday.  It was a horrible time to be without a job (and benefits), there was almost no hiring at all that year, one of the worst economic down turns on record.  While it was a hard message,  I knew that it was not personal, I was just caught up on a bad math problem.

After calling home to share the bad news, I went back to my desk and kept working. I had never been laid off and was not sure what to do, but I was pretty sure I would have plenty of free time in the short term, so I set about figuring out  how to wrap things up there.  Later that day the founder of the company came by, asked why I had not gone home, and I replied that I would be fine with working till the end of the week if he was okay with it.  He thanked me.

Later that week, in a meeting where we reviewed and prioritized the projects I was working on, we discussed who would take on the top three that were quite important to the future of the company.  A few names were mentioned of who could keep them alive, but they were people who I knew would not focus on them at all.  So I suggested they have me continue to work on them, that got an funny look but when he thought about it , it made sense, they could 1099 me one day a week.  The next day we set it up.  I made more money than I could of on unemployment, but even better I kept my laptop and work email, so I looked employed which paid off later. 

That one day later became two days and then three, however, I eventually found other full time work in 2010.  Layoffs are hard,  but it is not a time to burn bridges.   In fact  one of the execs of that company is a reference and has offered me other opportunities for employment.